Small businesses await health care ruling | Health and Fitness

* What is the impact on companies if the Supreme Court upholds the law ? or tosses it entirely or in part?

NEW YORK ? Small business owners will be watching when the Supreme Court issues its ruling on the constitutionality of the Patient Protection and Affordable Care Act. The overhaul of the nation?s health care system requires that by 2014 all businesses with more than 50 employees must provide health care benefits that are deemed affordable under the law.

Opponents of the act have targeted a key provision known as the individual mandate. It requires all people to buy health insurance or pay a penalty. The rationale for the mandate is that the more people in the health insurance pool ? in particular, younger and healthier people who need little health care ? the cheaper care will be for everyone. Opponents of the individual mandate contend that it?s unconstitutional to require people to buy health insurance. The court has the power to uphold the law or rule all or part of it unconstitutional.

With a decision expected this week, here are some questions and answers about how this affects small business owners:

Q. What will owners have to do if the law is upheld in its entirety?

Employers will be subject to the law if they have 50 or more full-time workers or the equivalent of full-time workers (two people working half-time are the equivalent of one full-timer). Small businesses that don?t comply with the law ? either by not offering insurance or by offering insurance that?s not considered affordable ? will have to pay penalties. To be considered affordable, the insurance must pay for at least 60 percent of covered health care expenses, and employees may not be forced to pay more than 9.5 percent of their family income (before deductions and adjustments) for coverage offered by employers. Penalties are set according to a complicated formula in the law; they start at $2,000 per worker when there is no coverage, with the first 30 workers excluded from the calculation. Companies also face penalties if they provide coverage that isn?t deemed affordable.

Employers get a tax deduction for providing insurance, but some business owners may decide it?s cheaper to skip the insurance and pay the penalty, says Paul Keckley, executive director of the Deloitte Center for Health Solutions, the health-services research arm of Deloitte LLP.

?You can lose the tax deduction, pay the penalty and be better off,? Keckley says. But he also points out that the penalties are scheduled to rise over time, and so eventually employers are likely to comply with the law.

The law also requires small businesses to provide what?s called an essential health benefits package. The states are permitted to determine what benefits should be contained in policies that are issued in their states. That means that businesses that have employees in more than one state will have to comply with each state?s requirements.

Employers can buy insurance from health insurers. Others may opt to join companies known as professional employer organizations, like Administaff or ADP?s TotalSource division, that provide health insurance and other human resources services. The law creates what are being call health insurance exchanges ? markets where employers and individuals can search for the best rates. John Arensmeyer, chief executive of the Small Business Majority, an organization that lobbies on behalf of small businesses, says the exchanges essentially give small businesses negotiating power on insurance rates that they haven?t had in the past.

Article source: http://www.northjersey.com/news/160154375_Small_businesses_anxiously_await_health_care_ruling.html

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